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All fabrics are made out of fibers. Natural fibers such as cotton and wool consist of molecules that have a wavy or coiled structure. As the fibers are carded, spun and woven, the molecules stretch out. However, when heat is applied to the fabric through hot water or tumble drying, the molecules can spring back, causing the fabric to shrink.

Some fibers only shrink once or twice. Cotton tends to noticeably shrink during its first wash, but only shrinks minimally during subsequent washes. Because of this, many clothing manufacturers pre-shrink cotton before making garments.

Wool fibers have coiled molecule structures, which coil tighter when heat is applied to the fabric. Washing can also break down wool fibers, which contributes to shrinking. Unlike cotton, wool can shrink significantly during multiple washes, which is why wool clothing usually comes with "dry clean only" labels.

Some types of fabric do not easily shrink. Synthetic fibers such as polyester have straight molecule structures, which helps fabric keep its shape when it is washed. Blended fabrics such as cotton-polyester blends are also less likely to shrink in the washing machine, because the polyester helps the fabric retain its shape.